What are Sebi's new Life Cycle Funds?

Life Cycle Funds are a new category of mutual fund schemes introduced by Sebi. They are open-ended funds with predetermined maturity dates and a glide path designed for goal-based investing.

How do Life Cycle Funds work?

These funds automatically align asset allocation with an investor's time horizon, gradually shifting from equity to lower-risk assets as the investment goal nears, promoting discipline and simplifying financial planning.

Home / Business and Economy / New Life Cycle Funds Simplify Goal-Based Investing

New Life Cycle Funds Simplify Goal-Based Investing

Q: What is the tenure for Life Cycle Funds?

Life Cycle Funds can be launched with a minimum tenure of five years and a maximum of 30 years, with tenures available in multiples of five years.

26 Feb

•

Summary

Life cycle funds automatically adjust asset allocation over time.
Funds offer predetermined maturity with a glide path.
Minimum tenure is five years, maximum is 30 years.

New Life Cycle Funds Simplify Goal-Based Investing

The market regulator, Sebi, has launched Life Cycle Funds, a novel mutual fund scheme category. These are open-ended funds characterized by predetermined maturity dates and a 'glide path' for goal-based investing.

Radhika Gupta, MD and CEO of Edelweiss Mutual Fund, hails this as a significant advancement for goal-based investing. She noted that these funds automatically adjust asset allocation according to an investor's time horizon. This feature helps maintain discipline and reduces the need for continuous investor intervention.

Life Cycle Funds can have a minimum tenure of five years and a maximum of 30 years, with launch tenures in multiples of five. Mutual funds are permitted to offer a maximum of six such funds simultaneously. The nomenclature will include the maturity year, such as Life Cycle Fund 2055.

Disclaimer: This story has been auto-aggregated and auto-summarised by a computer program. This story has not been edited or created by the Feedzop team.